In a report released today, Heather Balsky from Bank of America Securities reiterated a Buy rating on Thomson Reuters (TRI – Research Report), with a price target of $160.00.
Heather Balsky’s Buy rating for Thomson Reuters (ticker: TRI) is primarily influenced by the company’s prospects for accelerating sales growth and the potential for compounding EPS growth, coupled with strong cash flow generation. Balsky anticipates that Thomson Reuters will guide towards progressively increasing organic sales growth, especially fueled by advancements in its Legal segment through the monetization of GenAI, as well as growth in recently acquired businesses. She believes that while the market has varied expectations regarding organic sales growth, Thomson Reuters has the capacity to surpass these projections even amidst a tepid US economy that could affect transactional sales and Corporate sales cycles.
Moreover, Balsky’s outlook is informed by the prediction that margin pressures, previously a concern for investors, have been largely accounted for in the company’s guidance and the market’s understanding. Despite investment in GenAI and recent acquisitions potentially impacting margins, the anticipated guidance aligns with expectations, suggesting that the downside risk is already priced into the stock. Additionally, Balsky positions her 4Q EPS estimate above consensus, bolstered by stronger organic sales growth and EBITDA margins. The upcoming fourth-quarter earnings call and March Investor Day are viewed as potential catalysts for reaffirming Thomson Reuters’ path to improved growth and profitability, which further justifies the Buy rating.
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Thomson Reuters (TRI) Company Description:
Thomson Reuters Corporation is a multinational media conglomerate which engages in providing news and business information services to professionals. It offers value-added information and technology to users in the fields of accounting, financial services, law, tax, corporate training and assessment, reference information, higher education, scientific research and healthcare.
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